Judge will rule if firm can pitch to plaintiffs

Attorneys seek appeal after payment stopped

January 12, 2007|By Matthew Walberg, Tribune staff reporter

A good chance at getting a little money, or a not-quite-as-good chance at getting a lot of money--those are the stakes for thousands of Blue Island residents in a court hearing Friday on a class-action lawsuit against the now-shuttered Clark Oil refinery.

The hearing stems from an unusual decision that Cook County Circuit Judge Cheryl A. Starks made in December, when she decertified the class-action suit and vacated a $120 million judgment by a jury in 2005 against the refinery's owner.

After the decertification, the new owner attempted to reach private settlement with some of the plaintiffs without their attorneys present, until Starks put a stop to it, pending Friday's hearing.

For years, residents complained about noxious gas, ash and dust that spewed from the 170-acre plant at 131st Street and Kedzie Avenue, killing plants and staining walls. Explosions were blamed for broken windows and cracked foundations in nearby homes, and in 1994 four dozen students at a local high school were taken to the hospital for dizziness and difficulty breathing linked to pollutants emanating from the refinery.

But in rulings in November and December, nearly a year after the jury's decision, Starks granted a defense motion to decertify the class action, saying the plaintiffs failed to prove that all members of the lawsuit, not just the few who testified at trial, suffered to the same degree.

"Because the damages of the absent class members were not proven at trial, it is highly speculative as to what if any damages the absent class members suffered," she said in her order. Starks wrote that members who lived farthest away from the refinery and may have suffered only minor nuisance were never identified in court and it was "unlikely that everyone living within [the class] area sustained the same amount of damages."

The nuisance experienced by each was unknown, so it was impossible to know how to fairly divide the award, Starks wrote.

Plaintiff's lawyers seek appeal

Attorneys for the plaintiffs are seeking a reversal with the Illinois Court of Appeals. But for now, Starks' decision has left the 6,000 households comprising the class in legal limbo: Is their class-action suit still alive? Should they hire new lawyers and pursue individual lawsuits? Or should they take a deal offered by the new owner?

Valero Energy Corp., the Texas-based company that in 2005 bought the refinery--renamed Premcor--sent representatives to a number of the plaintiffs after the December ruling. They offered cash settlements for signed agreements that no other legal claims would be pursued against the company.

Those overtures infuriated the plaintiffs' attorneys, who said Valero's offer of $1,000 for each year residents lived near the plant between 1993 and 2001 was pennies on the dollar compared with what they might receive from the jury's award.

They claimed the company should not have gone directly to class members and also lied, telling them their lawsuit was over and that they would not be getting money from the award.

"This is like something out of `The Sopranos': going to the neighborhood, lying to people, interfering with the attorney-client relationship, completely unethical," said Robert Wagner, one of the plaintiffs' attorneys, according to a transcript of a Dec. 20 hearing.

"Our position is that these people ... are still our clients ... and they will remain our clients until you order otherwise, or until they receive notice that we are not representing them," Wagner told the judge.

John Berghoff Jr., an attorney for Valero, argued the plaintiffs' attorneys cannot represent a class that no longer exists, according to the transcript. "There is no class. It's been decertified."

Starks granted an emergency motion Dec. 20 to bar Valero from further contact with class members until she could hear other arguments.

"On Friday, she's got to decide whether she's going to stop the defendant from soliciting class members," Wagner said. "We're asking her to stop them from doing it while the appeal is pending."

Valero maintains there was nothing wrong with the offers.

"Since the award has been thrown out and the class disbanded, Premcor was in the community near the refinery with a settlement outreach program," Valero spokeswoman Mary Rose Brown said in an e-mail Thursday. "But at the request of the court, we suspended the settlement outreach until the judge has an opportunity to review any issues raised by the former class counsel."

Legal expert questions ruling

Legal experts said a decision to decertify after trial was rare and that more commonly the class-action goes forward to first determine whether a defendant is liable for adverse consequences. If so, then individual members of the class can use that finding as basis for claims against the company to determine the damages they're entitled to receive.

"This case is certainly amenable to class-action treatment," said Steven Greenberger, associate dean at the DePaul University law school. "I think ... you could create three or four classes based on distance."

Stephan Landsman, another DePaul University law professor, expressed concern over Valero's offers of settlements to class members.

"To go out there and start contacting people who may indeed be represented, whose [legal] interests may have not been extinguished, is troubling. It troubles me and seems like opportunism," he said.